Broadband on the run

Britain's status as the sick man of Europe in terms of broadband penetration may soon be coming to an end, writes Victor Keegan.

Everyone who was anyone got a big handout from Gordon Brown in his spending statement this week. Everyone, that is, except the lobbies demanding high-speed broadband access to the internet.

The Treasury seems to have decided that enough is enough. This may be no bad thing. At long last BT is waking up from its long slumber and realises that its own future, as well as that of the country, lies in the rapid exploitation of broadband offering fast "always on" access to the internet for home and business computers.

For nearly 20 years there have been calls for all British homes to be wired up with broadband connections. This is on the grounds that it will happen eventually anyway but that those countries that do it first will gain a competitive advantage in selling the products - from online gaming to affordable video-conferencing - that will be spawned by the broadband revolution.

The problem was a digital version of the old chicken-and-egg conundrum: no one would invest in the infrastructure until the products were there, but no one would invest in products until the infrastructure was in place. This was a good enough reason for inertia, especially by BT which had a huge and lucrative domestic monopoly to preserve.

It was no surprise when BT moved at the pace of a snail in the Grand National when the government asked it to open up its monopoly of the "final mile" connection to homes to competitors offering rival broadband systems. Now BT has changed its spots.

With all the enthusiasm of someone converted to a new faith, BT Retail is rolling out a new version of broadband that is not only cheap (at £27 a month with easy self-installation) but pioneering as well. It effectively abolishes the need for an internet service provider (ISP) by giving you direct access to the internet.

BT Retail doesn't have its own portal, as other ISPs do. Instead, you get a menu of the most popular options (objectively chosen it is claimed) such as Google, Yahoo or clara.net, which you can choose along with your chosen email provider. You can, if you want, choose Btopenworld, which is BT's ISP ( and which charges 10% more for the frills) but it is operated totally independently of BT Retail.

BT Retail is not yet advertising its product very heavily but claims it will play a crucial role in achieving BT Group's target of a million broadband users by summer 2003 and 5 million by 2006.

I am beginning to believe them. With the cable broadband rollout also gathering momentum (and now offering faster access speeds than BT) it looks as though Britain will no longer be the sick man of Europe in respect of broadband penetration. The unanswered question is where will the new content come from?

There are obvious applications, like gaming, betting, film swapping, online-care, online medicine and cheap video conferencing. But it is very likely that the most interesting applications will drop out of the sky (as peer-to-peer file swapping and blogging did recently) and as text messaging did when mobile phones were being introduced on a big scale.

But do we have to sit back and wait or can we do anything about it proactively? The most interesting idea was contained in a little noticed report by the government earlier this month. It suggested setting up the equivalent of a Channel 4 for broadband content (funded by government and industry). It would, among other things, be able to commission broadband content.

This could nurture a whole new generation of broadband-hungry entrepreneurs. Above all, it might just prevent the Americans from sweeping all before them with content providers becoming the new Hollywood in the US, and European competitors left out in the cold. Mr Brown should keep that in mind for his next Budget.

· Victor Keegan is editor of Guardian Online